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October 2025, question 70
Valuation, Appraisement and Duty Assessment · Valuation
A shipment of 1,000 water bottles manufactured in Germany is entered at $20.00 per unit at the Port of Philadelphia. The water bottles were shipped from Hamburg to Philadelphia with a shipping cost of $300.00. On the invoice, a credit of $10,000.00 for a previous overpayment by the buyer has been applied to the selling price. The total due on the invoice is $10,300.00. What is the transaction value of the merchandise based on the provided information?
- $10,000.00
- $20,300.00
- $10,300.00
- $20,000.00
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CBP's answer: D. D: $20,000.00
The price actually paid or payable is 1,000 x $20.00 = $20,000. Section 152.103(a)(2) treats a price reduction on the current importation that settles a debt the seller owes the buyer (here the $10,000 credit for an earlier overpayment) as an indirect payment, so it does not reduce the price. The $300 Hamburg to Philadelphia shipping is excluded by 152.102(f). The transaction value is $20,000 (D).
where the buyer receives a price reduction on a current importation as a means of settling a debt owed him by the seller 19 CFR 152.103(a)(2)
exclusive of any charges, costs, or expenses incurred for transportation, insurance, and related services incident to the international shipment 19 CFR 152.102(f)
Search for: Indirect payment
CBP's key cites: 19 CFR 152.103(a)(2)
Question and key from CBP's October 2025 exam and answer key. The walk-through is ours; quotes are from the pinned editions in the reference viewer (HTSUS 2026 Basic, 19 CFR 2025 edition).